How can loud noise cause hearing loss?

Damage to inner ear. The inner ear is a neural sense organ and it is finely tuned to discrimate sounds within a certain range. Since it is a "nerve" system, it conducts electrical activity. If the electrical activity is intense or prolonged... It can damage the neural mechanisms of the inner ear. It is similar to any nerve damage that can happen with any other nerve of the body if it is injured.
80dB and above. Any noise above 80db and above persistent causes hearing loss. It most often affects the hair cell in the cochlea. Sudden explosive noise causes ear drum perforation. Or sensorineural deafness.